Are Millennials being held back by financial stress?

Mar 26, 2018

Every generation marches to its own tune. The Greatest Generation danced to the Big Band sound; Baby Boomers cried and screamed for Elvis and the Beatles; Generation X took us from folk to punk; and Millennials have so many genres they’ve changed the way we listen to music, with Spotify, Pandora, and Apple Music. They’re also more likely to send a text than an email or a letter, to order an Uber than take a taxi, and to watch Netflix than rent a movie.

Furthermore, Millennials have a different financial profile than their predecessors. Also known as Generation Y, they are getting married and buying homes later than their parents, and fewer are car-owners than were their older cohorts at the same age. As we’ve learned in our annual Financial Stress Survey,1 far more Millennials report feeling financially stressed than do Baby Boomers, and they spend more time than older workers worrying about personal finances at work.

TBH they’re a little shook

Half of Millennials would not be able to cover a $2,000 emergency with cash, and 31% have no emergency savings. The top financial worries among Millennials are:

  1. Emergency savings level

  2. Current financial situation

  3. Monthly rent payments

  4. Credit card debt / Day-to-day bills – tie

  5. Retirement savings

Much of the stress is caused by student loan debt, as 46% of Millennials are currently paying off student loans. Two-thirds say their level of debt, including credit card debt, is a problem. When asked what’s keeping them from saving for retirement, their answers are:

  1. Poor spending habits

  2. Credit card debt

  3. Student loan debt

  4. Saving for a house

It’s time for financial goals

Echoing their top worries, Millennials would like help with:

  1. Retirement planning

  2. Investing

  3. Budgeting

  4. Purchasing a home

This generation has had access to personal technology since they were children, and they’re especially comfortable conducting personal business on their smartphones. And although Millennials have a slight preference for online advice over in-person advice, it’s a surprisingly close race. Despite their heavy use of social media, they do not turn to that channel for help with financial issues – instead, they expect help dealing with financial wellness from their employer. So even though technology-based solutions will find appeal, the personal touch and advice from a trusted source – like an employer – need to be part of the solution.

Outreach to Millennials should reflect who they are and how they like to interact. Technology-based solutions need to be personalized and interactive to engage this technically savvy generation. Employers and financial professionals can help by providing a holistic approach to finances. Millennials need help figuring out how to juggle and prioritize the short-term (rent payments and student loan payments), medium-term (emergency savings and saving for a house), in order to enable the long-term (retirement savings).  If we can help them crack that code and relieve some of the financial stress, there’s no telling what industry they’ll change next.

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1In June 2017, John Hancock Retirement Plan Services sponsored our fourth annual Financial Stress Survey. Working with the respected research firm Greenwald and Associates, we surveyed more than 2,000 workers to learn more about individual stress levels, their causes and impacts, and strategies for relief. All data in this article is from John Hancock’s 2017 Financial Stress Survey.

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These articles are not an edorsement of any particular product, service or orginization; nor are they intended to provide financial, tax or legal advice. They are intended to promote awareness and are for educational purposes only.